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The Central Laundry in Dartmouth
The Central Laundry in Dartmouth



Since being elected in June 2009 Nova Scotia's NDP government has committed itself to cutting costs in order to balance the provincial budget. These cuts are largely directed to education and health care since they are said to be the areas of greatest government expenditure although they don’t seem to have a lack of money when it comes to handouts to corporations. Towards this end the Dexter government has imposed the demand that District Health Authorities reduce their spending by a certain percent without affecting patient care and reducing wait times.

Recently the NDP government in Nova Scotia contracted Ernst and Young, a private auditing firm known for its “creative accounting” schemes, and a firm which is used to do work that was previously done by civil servants, (See Harper Government's Massive Assault on Public Sector, by Pierre Chénier http://www.cpcml.ca/Tmld2012/D42115.htm#2.) for the price of $98,000 to report on how to merge services for the Nova Scotia Health Authorities and the Isaac Walton Killam Children's Hospital. The report “recommended that a single, province-wide Shared Services Organization be established with accountability for the provision of 5 administrative & support services to the DHA's and the IWK” while shedding 128 non-medical jobs, and the savings would go to fund patient care.

Among the five services recommended for merger was the laundry service. While E & Y recommended that the other services be delivered by the “Shared Services Organization,” it recommended that laundry be done by a “third party.” How this is to be done remains a mystery with the former Health minister, Marilyn MacDonald stating in March that she stood in opposition to privatization but without opposing the idea of merging or centralizing laundry services. She said that she opposed it because "outsourcing can lead to a deterioration in the wages and benefits of the workers who are currently employed in those areas." It is not clear that the government will act on that advice from Ms MacDonald who is now Finance minister. Recently the Dexter government announced that it was handing over its SAP services that handle payroll, employee and health records over to the giant US multinational IBM. Are other areas like laundry services likely to follow?

According to  a union employee who is involved in healthcare, the privatization process is already under way. Crothall, a subsidiary of the Compass Group, one of the world's largest multi-nationals is positioned within the laundry services of Capital Health. “Part of Compass is also Morrison —Morrison Foods. So right now at Capital Health, Morrison Foods represents the management of the restaurant services within Capital Health and Crothall represents the management of laundry services. So the foot is in the door.” In Laundry services now 50 employees work for capital health and 65 work for Crothall. Both groups are members of NSGEU but in separate locals.

According to our source, control over hospital laundry services is a rich prize for international monopolies like the UK based Compass Group, or home-grown private businesses. 

“You can see that by contracting out it would be a large multi-national, or a home-grown company with connections to the government that would be the successful bidder. And that would be more than likely a company that would be paying wages at a far less level than they do to unionized workers. I think there are seven or eight laundries in the province. Most of which are associated with district health authorities. There is one in Cape Breton and six to eight on the mainland. Most of them would probably be unionized. Certainly the laundry in Halifax is unionized. It is unionized by NSGEU, and they pump out [i.e. process] about a eleven million pounds [of laundry]. Cape Breton and the remaining mainland laundries put out another eight million pounds. So that is nineteen or [nearly] twenty million pounds that would be a very profitable contract for a private company to get because it is obviously guaranteed, and their profit ratios would be guaranteed as well.”

A false debate has ensued in the legislature. On 21 November Leader of the Nova Scotia Progressive Conservative Party, Jamie Bailey, said in the Legislature that the Dexter government has rejected 80% of the recommendations of the Ernst and Young report which according to the Conservative leader would have saved millions of dollars which could be provided for patient care and necessary equipment. He accuses the NDPs attempt to reduce the size of the Nova Scotia’s healthcare administration represents little change and amounts to nickels and dimes in the healthcare budget. (See  PC Caucus of NS web site http://www.pccaucus.ns.ca/.)

The monopoly media tries to conceal these cuts behind euphemistic language such as that the “…provinces hospitals are declining in health” (http://thechronicleherald.ca/novascotia/185585-auditor-general-ns-hospitals-in-declining-health) as the Auditor General commented last week. He also noted that the answer to improving hospitals is not about just spending money, because, “money is scarce” and that the province needs to “revamp its capital planning”. This is an interesting statement. For example, the province requested a meagre  $109 million for infrastructure improvement, but was given only $12.5 million and requested $37 million for new equipment but was only given $11.6 million for the new equipment. According to the auditor general “money is scarce” and yet the NDP handed out $304 million dollars to Irving for shipbuilding with the expectation that only $40 million of that amount would be repaid.

Tampering with essential things like hospital laundry and other parts of the health care system is a risky business. A hospital is as organism with component parts working together to keep it functioning. Clean laundry is an essential part of this organism. Privatization usually involves carving off the most profitable parts of public enterprises for sale to the private sector. This is really a short-sighted policy since short term profits come at a price to the society as a whole. There is a risk of plunging the entire economy into crisis by reducing the number of good jobs and avdersely affecting the way in which organizations like hospitals function.




Ernst & Young report on merging services


°Released in February 2012

° Evaluated 13 administrative and support services for merging

° 6 of the 13 were short listed for delivery by Merged Services

° E & Y “recommended that a single, province-wide Shared Services Organization be established with accountability for the provision of 5 administrative & support services to the DHA's and the IWK.”

° Those 5 services include: Finance and Payroll, IT and telecommunications, Laundry, and Supply Chain.

° All these services were to be delivered by the SSO accept for laundry services which E & Y recommended to be delivered by a third party (sounds like outsourcing or privatization).

° Then Minister of Health and Wellness Maureen MacDonald made a statement in March saying that she rejected outsourcing. However she would have advised some merger of laundry services. That was with specific reference to laundry services since they were singled out by E & Y to be provided by a third party, i.e. outsourced.

° Mean time Aramark had taken over food services in the past, followed by Morrison foods, a part of Compass Group monopoly (13th largest multi-national in the world) involved in "employee trafficking." Another Compass company, Crothall, has obtained a foothold in the laundry services. So the outsourcing, which Minister MacDonald has declared unacceptable, was already taking place. In the Capital Health Authority, Crothall administers laundry services and, while 50 laundry workers are Capital Health employees, 65 others work directly for Crothall/Compass. Both belong to the NSGEU union and separate bargaining units.

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